The relative importance of various asset items on a commercial bank's balance sheet reﬂects a bank's pursuit of which two conﬂicting goals?
A) proﬁts and risk
B) liquidity and proﬁts
C) assets and liabilities
D) buying and selling government securities

Question

Quizplus · Accepted Answer

The two conflicting goals are liquidity and profits. A bank must maintain enough liquidity to meet customers' demands to withdraw funds, but at the same time, it also wants to maximize profit by investing in assets that have higher returns. This balancing act requires the bank to constantly manage and adjust its asset holdings.

The Relative Importance of Various Asset Items on a Commercial